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Friday, February 21, 2014

Florida Tax Institute

FloridaThe three-day Florida Tax Institute concludes today at the Grand Hyatt in Tampa.  Tax Prof speakers include:

  • Samuel A. Donaldson (Georgia State), Annual Update
  • Lawrence Lokken (Florida), Current Developments in International Taxation
  • Martin J. McMahon, Jr. (Florida), Current Developments in Federal Income Taxation 

February 21, 2014 in Conferences, Tax | Permalink | Comments (0)

Kevin Durant Sues Accountant Over Tax Troubles

The Oklahoman:  Kevin Durant Sues Accountant Over Tax Troubles:

DurantOklahoma City Thunder star Kevin Durant is seeking monetary damages from a California accountant on counts of professional negligence, breach of fiduciary duty and breach of contract. He is asking for at least $200,000 on each count.

Oklahoma City Thunder star forward Kevin Durant is having tax troubles, and he blames his former accountant.

In a federal lawsuit, Durant complains the accountant made a number of mistakes on his company’s tax returns, such as deducting the cost of his personal chef as a business expense.

“Fees paid to a personal chef would not be regarded by a reasonably prudent accountant as qualifying for a business expense deduction,” Durant’s attorneys stated in the lawsuit.

Durant sued California accountant Joel Lynn Elliott in December on counts of professional negligence, breach of fiduciary duty and breach of contract. He is asking for at least $200,000 on each count.

(Hat Tip: Jon Forman.)

February 21, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

Call for Papers: Arizona State Legal Scholars Conference


On March 14-15, 2014, Arizona State hosts the Fifth Annual Legal Scholars Conference:

The purpose of the conference is to gather together “juniorish” academics (generally, those who have been in the academy for fewer than 10 years) to receive constructive feedback on their scholarship, to network, and to enjoy Arizona’s March weather!

We charge no registration fees and provide for free: (1) dinner and drinks the night before (Friday March 14th); (2) a spring training game (Cubs vs. Dodgers) or outing to the PHX Zoo for interested attendees; and (3) breakfast and lunch the day of the conference (Saturday March 15th). Attendees, however, must cover all travel and hotel costs. ...

[E]ach registrant will be asked to submit something for comment and feedback. The paper can be a draft of a work in progress, a recently accepted piece, or even just a half-baked idea; the only limitation is that it should not be a piece that is already published (because the whole point of the conference is to get feedback to improve the piece). Based on the subject of the paper, each conference attendee will be assigned to a group of other attendees with similar scholarly interests. The members of each group will read the papers of the other members of the group, and then provide feedback on those papers. In the past five years, we have had more than 200 law professors from around the country attend and exchange ideas—join this ever-growing group and come to the conference on March 14 & 15th!

February 21, 2014 in Conferences, Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 288

Bloomberg:  Big-Money Politics Groups Get Clarity From IRS They Hate, by Richard Rubin:

Groups that want to spend millions of dollars on political campaigns without disclosing their donors are getting a clear road map on how to do so from the U.S. Internal Revenue Service.

And some of the groups don’t like it one bit.

Republicans criticize the proposed IRS rules as an attack on free speech because they would limit voter guides and candidate forums. The rules also would provide a legal path for groups organized under section 501(c)(4) of the tax code to air campaign ads.

That would give some of the biggest players from the 2012 campaign, including Crossroads Grassroots Policy Strategies, greater certainty to run ads in ways that don’t risk their tax-exempt status going forward. They could run issue-based ads that mention candidates’ names months before an election, and then switch to a direct pitch closer to the vote.

“If I were sitting in the chair of a conservative political operative, I would be rubbing my palms together hoping that these (c)(4) rules would be adopted,” said Greg Colvin, an attorney at Adler & Colvin in San Francisco who specializes in the political activity of nonprofit groups.

That prospect of benefits for big-money political nonprofit groups -- which are mostly Republican-leaning -- runs counter to the message from Republican lawmakers, who call the IRS rules a political maneuver by the Obama administration to restrict groups favoring smaller government.

Continue reading

February 21, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, February 20, 2014

Harvard Survey of BigLaw: What Courses Should Students Take?

Harvard Law School LogoJesse M. Fried (Harvard), John C. Coates, IV (Harvard) & Kathryn E. Spier (Harvard), What Courses Should Law Students Take? Harvard's Largest Employers Weigh In:

We report the results of an online survey, conducted on behalf of Harvard Law School, of 124 practicing attorneys at major law firms. The survey had two main objectives: (1) to assist students in selecting courses by providing them with data about the relative importance of courses; and (2) to provide faculty with information about how to improve the curriculum and best advise students. The most salient result is that students were strongly advised to study accounting and financial statement analysis, as well as corporate finance. These subject areas were viewed as particularly valuable, not only for corporate/transactional lawyers, but also for litigators. Intriguingly, non-traditional courses and skills, such as business strategy and teamwork, are seen as more important than many traditional courses and skills. 

Harvard 1

Harvard 2

Harvard 3

Harvard 4


February 20, 2014 in Legal Education | Permalink | Comments (6)

Osofsky Presents Beyond Worst-First Tax Enforcement Today at UCLA

Osofsky 4Leigh Osofsky (Miami) presents Beyond Worst-First Tax Enforcement at UCLA today as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh, Kirk Stark, and Alexander Wu:

When enforcement resources are limited, how should the scarce enforcement resources be allocated to maximize compliance with the law? The answer to this question can determine to what extent the law on the books translates to the law in practice. A dominant school of thought in the tax literature suggests that they should be allocated based on a “worst-first” method, whereby the individuals likely to be most noncompliant are targeted. However, “worst-first” methods suffer some underappreciated weaknesses. While “worst-first” methods can encourage all individuals to increase compliance so as not to be deemed the “worst,” they can also provide cover to engage in noncompliance that is perceived moderate for the relevant population. This dynamic can become most problematic in highly noncompliant populations. In such populations, existing, high levels of noncompliance, and underlying, structural causes of the high noncompliance can serve as coordinating mechanisms, providing mutual assurance of low compliance. Moreover, “worst-first” theories do not provide a comprehensive explanation for the group and project-based enforcement practices that are found in a number of actual enforcement settings. In response to these deficits in existing theory, I draw on work from across different disciplines to develop a new layer of analysis regarding the allocation of scarce tax enforcement resources. I suggest that, under certain conditions, deterrence can be enhanced by allocating scarce enforcement resources among a low-compliance population of taxpayers through a process I call microdeterrence. After setting forth the theoretical case for microdeterrence, I examine how it might apply in the cash business tax sector, a setting that presents particular challenges for “worst-first” methods. I conclude that microdeterrence may increase compliance, meriting its application and empirical evaluation. More fundamentally, this Article underscores the importance of the allocation of scarce enforcement resources, some of the deficits in existing theory, and the potential benefits of integrating additional layers of analysis.

February 20, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Fleming Presents Formulary Apportionment in the U.S. Today at San Diego

Fleming J. Clifton Fleming (BYU) presents Formulary Apportionment in the U.S. International Income Tax System: Putting Lipstick on a Pig? (with Robert J. Peroni (Texas)) at San Diego today as part of its Tax Law Speaker Series:

[T]he authors argue that formulary apportionment and the current standard, arm's length transfer pricing, are just two shades of lipstick on the pig that is the US international tax system, with its twin features of deferral and cross-crediting. They conclude that formulary apportionment might be the less offensive shade, but in effect the whole discussion is a diversion from a broad reform that is sorely needed on the pig itself.

February 20, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

2015 U.S. News Law School Rankings

US NewsRobert Morse, Director of Data Research for U.S. News & World Report, has announced that the 2015 law school rankings will be published online on March 11, 2014.  The 2015 edition of Best Graduate Schools will be available for sale on newstands on April 8, 2014.  There will be one change in the law school rankings:

In a change from previous years' rankings, we asked all ranked schools in the fields of law, medicine and education to supply U.S. News with names of working professionals or company contacts in their disciplines who hire their new graduates. U.S. News used a sampling of those names as the basis for creating the pool of nonacademics surveyed in those fields who were asked to rate the schools. 

U.S. News Law School Rankings for previous years:

February 20, 2014 in Law School Rankings, Legal Education | Permalink | Comments (2)

Taxpayer Support for Extra IRS Funding for Enforcement Drops 11%, to 10-Year Low

IRS OversightThe IRS Oversight Board yesterday released the 2013 Taxpayer Attitude Survey (Feb. 2014):

The Board’s survey found that 59 percent of respondents believe that the IRS should receive extra funding to assist more taxpayers, down eight points since last year’s survey. Only 55 percent said that the IRS should receive more funding to enforce the nation’s tax laws, down seven points from 2012. In addition, only 39 percent of respondents believe that the IRS maintains a proper balance between service and enforcement, down four points from last year’s findings.  


Figure 9

February 20, 2014 in IRS News | Permalink | Comments (1)

Call for Book Reviews: Michigan Law Review

Michigan The Michigan Law Review has asked me to post its solicitation of book reviews for its 2015 Survey of Books Related to the Law:

The Michigan Law Review publishes an Annual Survey of Books dedicated to book reviews. Book reviews are not included in any other issue of the Michigan Law Review. The Survey includes reviews of books published in the current year and the past three years. The Volume 113 Book Review issue will be published in spring 2015.

Proposal guidelines can be downloaded here. Manuscripts and draft sections to accompany the proposal are appreciated. Please note that all Book Review proposals, drafts, and manuscripts must be submitted via email to Decisions regarding the upcoming issue will generally be made between March and May of 2014.

Please note that we prefer that finished drafts be no more than 8,500 words, including footnotes.

To request an expedited decision or to contact the Book Review Editors, please e-mail

February 20, 2014 in Book Club, Legal Education, Scholarship, Tax | Permalink | Comments (0)

Christians: Taxpayer Rights, On and Off-Shore

Tax Analysys Logo (2013)Allison Christians (McGill), Taxpayer Rights, On and Off-Shore: The 2013 Taxpayer Advocate's Report to Congress, 73 Tax Notes Int'l 233 (Jan. 20, 2014):

In the 2013 National Taxpayer Advocate's Report to Congress, two concerns take center stage: the need for greater protection of taxpayer rights, and the increasing pressure on the system created by the U.S. tax regime’s extraterritorial reach. Neither of these issues is new; indeed, the NTA has repeatedly attempted to raise awareness of each over several years. But the Report demonstrates that these two concerns are on a collision course, and impact looks imminent for 2014 as the US doubles down on long under-enforced jurisdictional claims over nonresidents with US nationality or legal status. The basic impracticality of finding and claiming nonresidents with US ties is compounded by the violation of internationally recognized tax jurisdiction norms, creating an unsustainable enforcement rift that directly challenges the voluntarism theme that Olsen views as key to the fiscal system as a whole.

February 20, 2014 in Scholarship, Tax | Permalink | Comments (0)

NALP: Entry-Level Law Firm Recruiting Remains Flat

NALP New LogoNALP, Entry-level Law Firm Recruiting Remains Mostly Flat (Feb. 19, 2014):

For the fifth year in a row, law firms continued to exercise limited entry-level hiring. With the large law firm business model still facing significant challenges five years after the Great Recession, recruiting volumes by U.S. law firms on the campuses of U.S. law schools remained mostly flat during the late summer and early fall of 2013 compared with recruiting activity the year before. There were variations by region and by city, but overall law firms continued to exhibit caution in recruiting new associates. Over the last four years law firms have certainly increased their entry-level hiring activity compared with the crash in entry-level hiring reflected by the data from2008 and 2009. Rather than exhibiting the slow and steady recovery that might be hoped for, however, the pattern in law firm entrylevel recruiting has been something like two steps forward and one step back. Although the percentage of firms making fewer offers for summer associate positions exceeded the percentage that reported making more offers than they had the year before, nonetheless a significant number of firms did make more offers. Similarly, a higher percentage of callback interviews resulted in offers compared to the previous year, and the yield on those offers fell as thereweremore offers inplay, but at the same time, the recruiting volume for 3Ls fell back again after slowly rising for three years.

February 20, 2014 in Legal Education | Permalink | Comments (0)

25 Law Schools Suffer Three-Year Enrollment Declines of at Least 28%

National JuristNational Jurist:  Cooley, NYLS Have Largest Enrollment Declines Since 2010-2011:

The drop in law school applications during the past three years has had a profound impact on enrollment, according to a new study by The National Jurist.

Law school enrollment has dropped by an average of 99 students per school from 2010-2011 to 2013-2014, with only 16 schools enjoying an increase in students.

Eighteen law schools saw enrollment drop by more than 30 percent, led by University of La Verne (down 66.2 percent) and Thomas M. Cooley Law School (down 40.6 percent). Cooley Law School, with five campuses in Michigan and Florida, dropped from 3,931 students in 2010-2011 to 2,334 students in 2013-2014, the single largest drop in raw numbers.  ... New York Law School, which was battered by a critical New York Times article in 2011, has seen enrollment drop from 1,923 to 1,179, a 38.7 percent decline.

The National Jurist compared numbers for the 2010-2011 academic year from the American Bar Association’s Official Guide to Law Schools with 2013-2014 data from law schools’ most recent ABA 509 reports. The ABA now requires law schools to post detailed information on their websites in January of each year. At press time, The National Jurist was able to compare data for 196 law schools. The median law school saw enrollment drop 10.8 percent.

  1. La Verne -66.2%
  2. Cooley -40.6%
  3. Catholic -39.5%
  4. New York Law School -38.7%
  5. Dayton -38.5%
  6. McGeorge -38.4%
  7. Widener (Harrisburg) -36.9%
  8. New Hampshire -34.8%
  9. Seton Hall -34.7%
  10. Liberty -33.9%
  11. Western New England -33.3%
  12. Case Western -32.7%
  13. Hamline -32.7%
  14. Ave Maria -31.8%
  15. Appalachian -31.0%
  16. Widener (Delaware) -30.5%
  17. Vermont -30.5%
  18. Saint Louis -30.2%
  19. Duquesne -29.7%
  20. Pace -29.3%
  21. Tulsa -29.3%
  22. Quinnipiac -28.9%
  23. George Mason -28.9%
  24. California Western -28.1%
  25. Iowa -28.0% 

February 20, 2014 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 287

IRS Logo 2New York Times editorial:  Change the Rules on Secret Money:

In November, when the Internal Revenue Service finally stirred itself to propose a modest crackdown on the abuse of the tax code by political groups, it was immediately attacked by tax-exempt nonprofit groups on the right. That wasn’t too surprising; secret donations from conservatives to these groups are the principal reason American politics is now dominated by those with huge bank accounts.

But now liberal tax-exempt groups are also raising their voice in protest over the I.R.S.’s plans, afraid that they will be caught in the same crackdown, and will be unable to engage in political activity. The best thing the I.R.S. can do is to ignore both sides and proceed swiftly ahead, making its proposed rules even stronger to squeeze the influence of money out of politics. ...

If anything, the I.R.S. rules, which should be sped up to have some effect on the November elections, ought to be stronger. The same prohibitions against political activity should also apply to business leagues like chambers of commerce, and to unions, both of which are organized under different sections of the tax code that allow concealment of donors. The rules should be far more explicit that no amount of political activity is acceptable for any group that refuses to disclose contributors.

Secret money has become the scourge of the political system and needs to be eliminated regardless of the inconvenience to nonprofit groups, whatever their ideology. Republicans have blocked Congress from dealing with the problem, so now it is up to the I.R.S. to do its job.

New York Sun editorial, Supremacy of the IRS:

Secret money has become the scourge of the political system and needs to be eliminated regardless of the inconvenience to nonprofit groups, whatever their ideology. Republicans have blocked Congress from dealing with the problem, so now it is up to the I.R.S. to do its job.

Those lines are from an editorial in the Times this morning calling for the Internal Revenue Service to start moving against not-for-profit groups that Congress has refused to regulate. They are one of the most astonishing combination of sentences we’ve seen in a while for the schematic way in which they illuminate the dictatorial mindset. Where in the world did the Times, once a paper of liberal progress, get possessed of the notion that the executive branch should do things that Congress decided it didn’t want to authorize it to do?  ...

[E]ventually the American institutions will make it clear that the refusal of the Congress to do something — raise taxes, lower taxes, declare war . . . whatever — doesn’t mean that it’s okay for the Internal Revenue Service to go ahead and do it anyhow.

Dave Camp (Chair, House Ways & Means Committee), Press Release:

Given that this is mostly conservative groups we are talking about, it isn’t shocking that The New York Times is joining the Obama Administration in attempting to silence these non-profits.  While the Times suggests all exempt organizations should be treated equally, the regulations they endorse conveniently leave liberal labor union leaders free to engage in whatever political activity they want.  Over the past few years, the IRS has systematically targeted conservative groups, threatened conservative donors with higher taxes and leaked confidential taxpayer information.  This has already had a chilling effect in the conservative community.  The last thing any newspaper should endorse is granting the IRS more power to suppress engagement in the democratic process and the exercise of First Amendment rights.

Continue reading

February 20, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, February 19, 2014

Osofsky Presents Beyond Worst-First Tax Enforcement Today at Pepperdine

Osofsky 4Leigh Osofsky (Miami) presents Beyond Worst-First Tax Enforcement at Pepperdine today as part of its Tax Policy Colloquium Series hosted by Paul Caron:

When enforcement resources are limited, how should the scarce enforcement resources be allocated to maximize compliance with the law? The answer to this question can determine to what extent the law on the books translates to the law in practice. A dominant school of thought in the tax literature suggests that they should be allocated based on a “worst-first” method, whereby the individuals likely to be most noncompliant are targeted. However, “worst-first” methods suffer some underappreciated weaknesses. While “worst-first” methods can encourage all individuals to increase compliance so as not to be deemed the “worst,” they can also provide cover to engage in noncompliance that is perceived moderate for the relevant population. This dynamic can become most problematic in highly noncompliant populations. In such populations, existing, high levels of noncompliance, and underlying, structural causes of the high noncompliance can serve as coordinating mechanisms, providing mutual assurance of low compliance. Moreover, “worst-first” theories do not provide a comprehensive explanation for the group and project-based enforcement practices that are found in a number of actual enforcement settings. In response to these deficits in existing theory, I draw on work from across different disciplines to develop a new layer of analysis regarding the allocation of scarce tax enforcement resources. I suggest that, under certain conditions, deterrence can be enhanced by allocating scarce enforcement resources among a low-compliance population of taxpayers through a process I call microdeterrence. After setting forth the theoretical case for microdeterrence, I examine how it might apply in the cash business tax sector, a setting that presents particular challenges for “worst-first” methods. I conclude that microdeterrence may increase compliance, meriting its application and empirical evaluation. More fundamentally, this Article underscores the importance of the allocation of scarce enforcement resources, some of the deficits in existing theory, and the potential benefits of integrating additional layers of analysis.

Update:  Post-presentation lunch:


February 19, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Graetz Presents Technological Innovation, International Competition, and International Taxation Today at Penn

GraetzMichael J. Graetz (Columbia) presents Technological Innovation, International Competition, and the Challenges of International Income Taxation, 113 Colum. L. Rev. 347 (2013) (with Rachael Doud (J.D. 2012, Yale)) at Pennsylvania today as part of its Center for Tax Law & Policy Seminar Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Because of the importance of technological innovation to economic growth, nations strive to stimulate and attract the research and development (“R&D”) that leads to that inn ovation and to make themselves hospitable environments for the holding of intellectual property (“IP”). Tax policies have taken center stage in their efforts to accomplish these goals and to capture a share of the income from technological innovations.

Continue reading

February 19, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Lederman Presents (Un)Appealing Deference to the Tax Court Today at Duke

LedermanLeandra Lederman (Indiana-Bloomington) presents (Un)Appealing Deference to the Tax Court, 63 Duke L.J. ___ (2014), at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:

The U.S. Tax Court hears the vast majority of litigated federal tax cases. It occupies an unusual place in the federal government in that it is a federal court located outside the judicial branch but whose decisions are appealable to the U.S. Courts of Appeals. This unusual situation coupled with its history as an independent agency in the executive branch can give rise to important questions, such as the standard of review that should apply to its decisions. In particular, should the Courts of Appeals treat Tax Court decisions the same as those of district courts in tax cases, or should they apply a more deferential standard analogous to review of an agency decision, as the Supreme Court held in 1943 in Dobson v. Commissioner?

Answering the standard of review question implicates issues of both law and policy. The article argues, contrary to some scholarship, that, as a doctrinal matter, no vestige of the Dobson rule remains and that Courts of Appeals must apply the same standard of judicial review they apply to district courts in non-jury cases. The article further argues that appellate review theory supports that result, as well. As the article explains, the Dobson rule was a largely instrumental one designed by Justice Jackson to reduce the volume of tax litigation. Although tax litigation has the unique characteristics of decentralization and the expertise of the Tax Court, the article demonstrates that those differences do not support departing from the policies supporting appellate review. Appellate courts therefore should not defer to the interpretations of the Tax Court any more than they do to those of the district courts.

February 19, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Death of Richard Jacobus

JacobusI am saddened to report that former Senior Litigation Counsel Richard Jacobus died on December 1, 2013 of complications from cancer:

Richard was a major force during his 10 year career at the Tax Division. He came here in 2000 as a Trial Attorney in the Civil Trial Section, Eastern Region, where he had also worked as a Summer Law Intern. Immediately prior to joining the Tax Division, he worked as a law clerk to the Honorable Reginald Gibson of the United States Court of Federal Claims. Just six years after joining the Tax Division, Richard was named a Senior Litigation Counsel. He handled many notable cases, most of which resulted in victories, and he achieved savings to the United States Treasury totaling hundreds of millions of dollars. ...

But Richard's courthouse accomplishments do not do him justice. Richard was kind and generous with his colleagues. A prodigious writer, Richard could produce beautifully written, thoroughly researched, persuasive briefs or letters in almost no time at all. Indeed, he often did so on a Blackberry while attending a deposition. Even after Richard left the Division for the Public Company Accounting Oversight Board in 2009, his heart remained with the Tax Division. He wrote numerous articles for Tax Notes and other publications countering views offered by the private tax bar. And he maintained at his own expense a PACER account so he could keep up on briefs filed for and against the Tax Division and provide advice and support to his former colleagues. Indeed, in at least one case, Richard had read the opponent's brief and suggested the necessary reply arguments before the trial attorney had even seen the other side's brief.

Prior to obtaining his law degree from George Mason School of Law in 1997, Richard worked as a Certified Public Accountant. He obtained his accounting degree from University of Houston in 1985, and began his career at what was then known as the Big Five accounting firm of Arthur Young & Company. Richard had only recently retired in the spring of this year.

Although I never met Richard, he was a loyal reader and friend of TaxProf Blog who sent me dozens of tips each year.  (Hat Tip: David Weisbach.)

February 19, 2014 in IRS News, Obituaries, Tax | Permalink | Comments (2)

The IRS Is at a Tipping Point: Under Attack, Distrusted, and Underfunded

IRS Logo 2Boston Globe, IRS is America’s Feared and Failing Agency: As Demands Set to Rise, Flaws Evident:

Week after week, Republicans on Capitol Hill have ratcheted up their drumbeat of discontent with the Internal Revenue Service, alleging that it targeted conservative groups and can’t be trusted. Six investigations are underway, ensuring the matter will drag on for months or years.

But there is a bigger question about America’s least-loved federal agency that barely gets asked: Is the IRS, which collects 90 percent of the nation’s revenue, up to the basics of its job? The surprising answer is that it often is not.

A Globe review of dozens of government reports and audits, as well as interviews with key officials, found a series of fundamental problems:

  • The IRS makes billions of dollars in potentially fraudulent payments because it lacks the ability to check whether many returns are accurate before refunds are mailed.
  • The IRS relies on tax preparers to file accurate returns on behalf of taxpayers. But many preparers are not required to receive training and can be declared a tax professional by paying a $64.25 fee to the IRS. A federal court on Tuesday rejected the agency’s effort to license such preparers.
  • The IRS is increasingly impenetrable to taxpayers with questions and complaints. The agency is so short-staffed it cannot answer nearly 40 percent of phone calls, and it has failed to meet its own 45-day deadline to respond to millions of letters per year from taxpayers. The same dismal rate is likely to be repeated this year, according to the agency.
  • The decision by Congress to cut the agency’s budget over the past four years by more than $1 billion, designed to save money, has had the reverse effect. The loss of about 10,000 employees, more than 9 percent of the workforce, has shrunk collections by $8 billion. In other words, the budget cut increased the deficit.

Globe 2

All of this helps explain why, in a strikingly harsh but little-noticed assessment of the IRS’s own office of the national taxpayer advocate, the agency was declared last June to be “an institution in crisis.” That was followed by the office’s January report to Congress that upped the sense of urgency, warning that unless changes are made soon, the IRS will “fail at its mission.”

Yet that mission is about to become even more complicated. Starting in the next tax year, the agency will be responsible for implementing key parts of the new health care law, requiring the biggest changes to the tax code in decades. ...

The story of the IRS today is one of a powerful entity at a tipping point — under attack, distrusted, and underfunded, yet crucial to the nation’s survival and prosperity.

February 19, 2014 in IRS News, Tax | Permalink | Comments (19)

Tax Prof Mount Rushmore

Mount RushmoreLebron James sparked a meme over the NBA's version of Mount Rushmore (Thomas Jefferson, Abraham Lincoln, Theodore Roosevelt, and George Washington) when he listed the four greatest players in NBA history as Larry Bird, Magic Johnson, Michael Jordan, and Oscar Robertson.  Kobe Bryant chimed in with his own version:  Larry Bird, Magic Johnson, Michael Jordan, and Bill Russell.  ESPN has created a Mount Rushmore of Sports, with lists of the four all-time greats in a variety of sports, and the media has created a wide range of Mount Rushmore lists.

I thought it would be fun to create a Tax Prof Mount Rushmore.  I asked the 350 subscribers to the TaxProf Email Discussion Group to take a survey identifying the four tax professors who belong on the TaxProf Mount Rushmore.  57 (16.3%) of the subscribers completed the survey and voted for 56 different tax professors.  The Tax Prof Mount Rushmore is:

Tax Prof Mount Rushmore

Boris Bittker (Yale) (named on 72% of ballots), James Eustice (NYU) (25%), Marty Ginsburg (Georgetown) (25%), and Stanley Surrey (Harvard) (37%).

The other top vote getters were Bill Andrews (Harvard) (23%), Michael Graetz (Columbia) (18%), Erwin Griswold (Harvard) (14%), and Marvin Chirelstein (Columbia) (12%).

February 19, 2014 in ABA Tax Section, Legal Education, Tax | Permalink | Comments (5)

Morse: A Simpler Offshore Profits Transition Tax

Tax Analysys Logo (2013)Susan C. Morse (Texas), A Simpler Offshore Profits Transition Tax, 73 Tax Notes Int'l 629 (Feb. 17, 2014):

Susan C. Morse proposes a simpler corporate transition tax to deal with the large amounts of cash parked offshore by multinational companies.

February 19, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

MOOCs and the Rise of Online Legal Education

MOOC (2014)Stephen Colbran (CQUniversity (Australia), School of Business & Law) & Anthony Gilding (La Trobe University (Melbourne), Faculty of Business Economics & Law), MOOCs and the Rise of Online Legal Education, 63 J. Legal Educ. 405 (2014):

While it is not suggested that legal education in general will be provided through open online courses with participants numbering in the hundreds of thousands, these courses provide an opportunity to explore how universities, law schools and academic staff may change the way they teach and relate to students. Similarly the learning relationships between students also may change as a consequence of the new paradigm. ... There is little doubt that modern learning models are challenging for both student and teacher.5 But this question remains: How will law schools adapt to these changes?

Prior TaxProf Blog coverage:

February 19, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

The Use of Disregarded LLCs by Charities

Alyson Outenreath (Texas Tech), "Uncharitable" Policy for Charities: Use of Disregarded LLCs by I.R.C. Section 501(c)(3) Organizations Is a Trap for the Unwary in Certain States, 54 S. Tex. L. Rev. 685 (2013):

This article will (i) explain how the imposition of the Texas Franchise Tax on Section 501(c)(3) Charities with subsidiary LLC structures in place arises; (ii) discuss why there is no compelling reason for the Comptroller to continue with its policy of taxing Section 501(c)(3) Charities that choose to operate in structures using wholly owned LLCs; (iii) discuss the ramifications of the Comptroller's policy; and (iv) set forth proposed solutions to remedy this potentially costly problem for Texas charities.

February 19, 2014 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 286

IRS Logo 2Chicago Tribune editorial:  The IRS Targets Political Speech Again:

The Internal Revenue Service is used to being universally disliked every April 15. But this year, the widespread denunciations have started early, and for good reason.

In November, the agency issued proposed new rules that are supposed to keep social welfare organizations from abusing their legal privileges by engaging in excessive electioneering. The effort came in response to complaints from Democrats about a 2012 surge in political spending by such tax-exempt groups, by the conservative Koch brothers and others to influence elections.

The IRS wants to curb such efforts, and it doesn't display much concern about the likely effect on free speech. But groups that engage in political advocacy, including the nonpartisan kind, are genuinely alarmed. ...

The agency does not get, or deserve, the benefit of the doubt in this realm — if only because it got caught targeting certain conservative organizations. In considering requests for tax-exempt status, it singled out groups with the term "tea party" or "patriot" in their names for extra scrutiny.

Continue reading

February 19, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, February 18, 2014

2014 National Tax Moot Court Competition Results

Moot CourtHere are the results of the 2014 National Tax Moot Court Competition sponsored by the Florida Bar Tax Section:

  1. Charleston
  2. Oregon
  3. LSU

Best Brief:  Oregon (runner-up: Loyola-Chicago)

Best Oralist: Lane Jeffries (Charleston)

February 18, 2014 in Legal Education, Tax | Permalink | Comments (0)

GE Sues For $658 Million Tax Refund

GE LogoForbes:  Where's My Refund? General Electric Sues For $658 Million Tax Refund, by Janet Novack:

General Electric, famous for its aggressive tax minimization efforts, filed suit Friday seeking a $658 million federal tax refund. That sum represents the $439 million in taxes and $219 million in interest GE coughed up in 2010 after Internal Revenue Service auditors disallowed a $2.2 billion loss it claimed from the 2003 sale of a small subsidiary, ERC Life Reinsurance Corp., to Scottish Re Group for $151 million.

In a bare-bones 12 page filing in the U.S. District Court for Connecticut, GE is vague about the IRS’ reasons for disallowing the loss, except to describe them as “erroneous.” But the dispute apparently centers on an internal restructuring of GE’s insurance business in December 2002 that manufactured $1.8 billion of the claimed $2.2 billion loss. If past cases are any guide, the IRS likely disallowed the loss on both technical grounds and on the basis that the restructuring itself was a tax motivated ploy lacking sufficient business purpose or economic substance. In its suit, GE insists the restructuring was done in response “to financial and regulatory issues confronting this business.” (Yep, if you’ve got a real business purpose, you can sometimes claim the benefit of an unreal tax loss.)

February 18, 2014 in Tax | Permalink | Comments (0)

TIGTA: 39% of IRS Employee Long-Term Travel May Not Comply With Tax Rules

TIGTA The Treasury Inspector General for Tax Administration today released Internal Revenue Service’s Executive Long-Term Taxable Travel (2014-IE-016):

Per the Internal Revenue Code [§ 162(a)(2)] and the Revenue Ruling 93-86, an employee who performs a temporary duty travel assignment exceeding one year at a single or principal location is subject to income taxation of his/her travel expense reimbursements. Compensation for services (including fees, commissions, fringe benefits, and similar items) are includible in gross income. Similarly, remuneration for services paid by the employer to an employee are wages subject to employment taxes, which generally include income tax withholding and the Federal Insurance Contributions Act taxes.

In Fiscal Year (FY) 2011 and FY 2012, there were 351 and 373 executives in the IRS, respectively. In FY 2011, the IRS executives received approximately $4.8 million in travel reimbursements. In FY 2012, executive travel reimbursements decreased to about $4.7 million. We analyzed travel information from the GovTrip and the Integrated Financial System for IRS executives to determine whether executive travel appeared to be long term and met the criteria of long-term taxable travel (LTTT) status. ...

We reviewed the travel records for 31 executives, less than 10 percent of the IRS executives employed, to determine whether their travel appeared to be properly classified as taxable or nontaxable. We found that the tax classification of travel for nine executives appeared to be incorrect based on their travel patterns and the IRS’s validation, and for three executives, the classification was not made in a timely manner as required by Internal Revenue Manual, Taxable Travel Reimbursement. Consequently, not all executives who were in a LTTT status were correctly and/or timely classified as such; therefore, the IRS did not withhold the appropriate amount of taxes on the travel reimbursements paid to some executives.

Without an effective periodic assessment and management review of the executives’ travel activities, the IRS cannot verify that its executives’ travel expenses are properly classified as LTTT when they should be. The inaccurate reporting of the LTTT resulted in the executives’ potentially underreporting income, Federal, State, Medicare, and Federal Insurance Contributions Act taxes.

February 18, 2014 in IRS News, Tax | Permalink | Comments (2)

Five Year Old's Letter to the IRS: 'It's OK If You Talk With My Mommy About My Taxes'

ViralNova, The IRS Sent This FIVE YEAR OLD BOY A Letter About His Taxes. His Response Is Classic. LOLOL:

They say taxes are a certainty of life, although that isn’t true for most 5 year-olds. However, there’s one little boy who must file an individual tax return for a variety of reasons. So when he received a letter from the IRS questioning several items on his most recent return, his mother naturally responded for him. She received this in return (regarding her 5 year-old son):

“Dear Mr. Smith: we don’t recognize Susan F. Smith as someone authorized to discuss your tax file. If you want Susan F. Smith to be authorized to discuss your return we suggest you go online and submit form 8892 and form, etc.” Since the government already had the little boy’s Social Security Number and knew he was a minor, his parents were perplexed. So, they naturally decided that he should write the IRS himself. This is his letter.

tax letter

(Hat Tip: Tom Bruce.)

February 18, 2014 in IRS News, Tax | Permalink | Comments (1)

The Non-Deductibility of Expenses of Getting a J.D. Degree

Philip Rukosuev, The Non-Deductibility of Juris Doctorate Degree Expenses Under Treasury Regulation 1.162-5, Ill Bus. L.J. (2013):

[I]n cases where concrete educational and examination requirements to become legally eligible to practice in a field must be met, the courts apply an objective approach to determine the deductibility of such expenses. The facts and circumstances of each case are not considered, rather, courts simply disallow a deduction exclusively because the education objectively qualifies the taxpayer in a new trade or business. Thus, the expense of obtaining a JD degree is never deductible under the present-day regulation since an individual may only practice in the legal profession by obtaining the compulsory education and passing the requisite bar examination.

(Hat Tip: José Gabilondo.)

February 18, 2014 in Legal Education, Scholarship, Tax | Permalink | Comments (4)

Serreze: Science, Taxes, and Bonds

Tax Analysys Logo (2013)Peter H. Serreze (Ropes & Gray, Boston), As Simple as It Can Be but Not Simpler:  Science, Taxes, and Bonds, 142 Tax Notes 729 (Feb. 17, 2014):

With the recent and potential future decline in governmental funding, many nonprofit research organizations are increasingly venturing into the world of commerce. This report examines the issues raised by this trend under the tax law restrictions applicable to the use of facilities financed with tax-exempt debt.

February 18, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

OECD Releases Common Standard For Combating Offshore Tax Evasion

OECD Logo 2The OECD has released a new single global standard for the automatic exchange of information between tax authorities worldwide:

Developed by the OECD together with G20 countries, the standard calls on jurisdictions to obtain information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions that need to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. The OECD will formally present the standard for the endorsement of G20 finance ministers during a 22-23 February meeting in Sydney, Australia. The G20 invited the OECD to develop a global standard on automatic exchange of information in 2013, and remains the driving force behind the move toward greater tax transparency worldwid

February 18, 2014 in Tax | Permalink | Comments (0)

Magliocca: Taxation of Judicial and Presidential Salaries

Concurring Opinions:  Taxation of Judicial and Presidential Salaries, by Gerard Magliocca (Indiana-Indianapolis):

As part of my Four Horsemen research, I’ve come across an issue that I was unaware of. Does the income tax (or a tax increase) as applied to federal judges and the President violate the rule that their salaries may not be reduced? Today the answer to that question is no. For a long time, though, the answer was yes.

February 18, 2014 in Tax | Permalink | Comments (0)

St. Thomas Launches Masters Programs in Compliance

USTThe University of St. Thomas School of Law has launched two masters programs in Organizational Ethics and Compliance:

The University of St. Thomas School of Law this fall will begin offering two graduate degrees in the field of organizational ethics and compliance. They are the master of studies in law (M.S.L.), for students who have completed a bachelor’s degree, and the master of laws (LL.M) for those who already hold the traditional law degree of juris doctor. ...

The move comes in response to employers who have answered increased government regulations by rapidly adding jobs for compliance professionals, even in times of high national unemployment. Large federal undertakings like the Affordable Care Act and the Dodd-Frank Act have further strengthened compliance professionals’ critical role within corporations.

February 18, 2014 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 285

IRS Logo 2Orange County Register editorial:  New IRS Threat to Political Expression:

The Internal Revenue Service wants to set tougher standards for how much political activity is too much political activity. If you’re like us, that sentence sends chills up your spine.

While the IRS has never been an institution that has commanded outsized admiration from Americans, the agency must be regarded with elevated suspicion in light of last year’s revelations that it was going out of its way to delay or prevent conservative groups from earning tax-exempt 501(c)(4) status under the tax code. House Ways and Means Committee Chairman Dave Camp, R-Mich., revealed last week that the scandal went deeper than we previously knew, with the IRS also conducting surveillance on existing 501(c)(4)s, the targets overwhelmingly (83 percent) consisting of right-leaning groups.

t’s against this backdrop that the agency is currently proposing new rules limiting the political activity that may be engaged in by “social welfare” organizations, the term of art used to describe 501(c)4 groups. Those rules would classify activity such as voter registration drives, the preparation of voter guides and get-out-the-vote efforts as “candidate-related political activity,” even if it is nonpartisan and doesn’t advocate for the election of any specific individual. Organizations that engage in too much of that behavior (and the IRS has yet to define how much is too much) would be at risk of losing their nonprofit status ....

It’s true that the confluence of money and politics can prove dangerous, but the greater danger surely stems from empowering those who govern to restrict the manner in which those who are governed can express their political viewpoints. That’s the reason that liberal and conservative groups alike are opposed to the proposed IRS rules. A free people deserve the right to voice their political opinions without state interference – a task made immensely more difficult by the IRS’ new proposal. For that reason, the proposed rules deserve to be abandoned with haste.

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February 18, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, February 17, 2014

Tax Court Seeks Amicus Briefs on Tax Treatment of Egg Donation

EggPerez v. Commissioner, No. 9103-12 (Feb. 14, 2014) (Holmes, J.):

This case was tried during the Court's January 6, 2014 trial calendar for San Diego, California, and may be of significance beyond the litigants because it is the first case addressing the inclusion in taxable income (and perhaps the proper characterization) of compensation received for the sale or donation of human eggs and related services. The Court set a briefing schedule for the parties at the end of trial, but discussed with them the possibility that others interested in the subject matter might wish to file amicus briefs. It is therefore

ORDERED that any amicus curiae brief be filed on or before May 9, 2014. Any amicus briefs, however, should address the appropriate tax treatment flowing from the peculiar facts of this case.

February 17, 2014 in Tax | Permalink | Comments (1)

Video: 33: Black Law Students Describe 'Emotional Toll' at UCLA

The Value of Faculty 'Disrupters'

DisruptersWall Street Journal:  The Value of Office 'Disrupters', by Peggy Drexler (Weill Cornell Medical College):

The narcissist, the scorekeeper, the gossip, the workaholic—how to handle the annoying co-workers in your life.

[N]ot all "disrupters"—the personality types who make it harder to get work done—harm office life or even productivity.

Take narcissists. Sure, they're terrible listeners and apt to gobble up all the credit. But they also can be charming, engaging and charismatic. They can attract and inspire followers and be terrific mentors and leaders—which is why so many bosses are narcissists. In a 2006 study of more than 100 CEOs, researchers at Penn State found that executive narcissism can actually be motivational. The key to working for such a boss is learning to share praise, making your own contributions subtly known and ensuring that the narcissist doesn't rule your work life.

Another classic disrupter is the passive aggressive type—the office scorekeeper. ... Scorekeepers don't play fair, which makes them tricky to get along with. But Pat Heim and Susan Murphy, authors of "In the Company of Women," argue that scorekeeping can have an upside, if used to encourage cooperation and motivate co-workers—a sort of "do for others what they do for you" philosophy.

Then there is the office gossip. A 2012 study at the University of Amsterdam found that gossip makes up a whopping 90% of office conversation—but isn't as detrimental as you might think. The researchers concluded that such behind-the-back chatter may be essential for group survival. They found that gossip can make offices run more smoothly and improve productivity, helping to keep underperforming workers in line while fostering camaraderie. ...

Finally, there are the obsessive, workaholic types—disrupters who live for order. They may be annoyingly rule-bound, but they set high standards, communicate well and make great operators, mentors and team members. As a 2011 study from the Rouen Business School in France reported, workaholism often can be constructive, inspiring co-workers to be more original and dedicated.

Adapting to personality types at work need not mean abandoning your principles. Even the most annoying co-workers often have something to teach. You also need to figure out if you yourself are a disrupter.

February 17, 2014 in Legal Education | Permalink | Comments (0)

IRS Releases Transfer Pricing Audit Roadmap

Trasnfer PricingThe IRS on Friday released Transfer Pricing Audit Roadmap:

In recognition of the strategic importance of transfer pricing, LB&I has established a dedicated team of transfer pricing specialists (Transfer Pricing Operations or TPO) headed by an executive and encompassing both the Advance Pricing and Mutual Agreement Program (APMA) and the Transfer Pricing Practice (TPP). This team has developed this Transfer Pricing Audit Roadmap (Roadmap) to provide the transfer pricing practitioner, whether employed in TPO or International Business Compliance (IBC), with audit techniques and tools to assist with the planning, execution and resolution of transfer pricing examinations.

The Roadmap is a practical, user-friendly toolkit that is organized around a basic audit time-line and that provides advice and links to useful reference material. It is not intended as a template – every transfer pricing case is unique, and the team will need to exercise its own judgment about how to best use these guidelines. The Roadmap is a “work in process” – users are strongly encouraged to contact the Income Shifting Issue Practice Networks (IPN) with any corrections, proposed additions or deletions, or other suggestions for improvement.

The following paragraphs summarize some of the key themes that run through the Roadmap and that should be kept in mind by the exam team in any transfer pricing case.

February 17, 2014 in IRS News, Tax | Permalink | Comments (0)

Rutgers Prof Suspended for Telling Students He Was Made to Teach a Course in Which He Had Zero Expertise

RutgersTown Hall, Rutgers Makes Professor Teach Class He Is Clueless About, Suspends Him for Telling Students:

Administrators on the main campus of Rutgers University in New Brunswick, N.J. have suspended a renowned anthropology professor because he told students that he knows nothing about the subject matter in a course school officials assigned him to teach.

The professor, Robert Trivers, had objected to teaching a course called “Human Aggression” this fall, reports The Star-Ledger. However, his anthropology department superiors told him he had to teach the class anyway.

In the first lecture, Trivers informed the 30 or so Rutgers undergrads who had signed up for the class that his plan was to learn the course materials gamely along with them. He observed that he thought it was strange that he was teaching the course in the first place since he is no expert on the material. ...

Administrators at the taxpayer-funded university then suspended Trivers for the crime of imparting this information to students. Rutgers officials also said Trivers was essentially refusing to teach the course, even though he was teaching the course.

Trivers, 70, is very unhappy with his suspension.

“You would think the University would show a little respect for my teaching abilities on subjects that I know about and not force me to teach a course on a subject that I do not at all master,” the professor told The Daily Targum, the campus rag

Trivers, who specializes in social evolution and holds a Ph.D. from Harvard University, argued vociferously that he is an accomplished scholar within his area of expertise. “I don’t want to sound immodest, but I am one of the greatest social theorists in evolutionary biology alive, period,” he told the Targum.

February 17, 2014 in Legal Education | Permalink | Comments (20)

Money, Money, Money: ABBA Wore Outrageous Outfits Onstage to Claim Tax Deduction

The Guardian:  Abba Admit Outrageous Outfits Were Worn to Avoid Tax:

AbbaThe glittering hotpants, sequined jumpsuits and platform heels that ABBA wore at the peak of their fame were designed not just for the four band members to stand out – but also for tax efficiency, according to claims over the weekend.

Reflecting on the group's sartorial record in a new book, Björn Ulvaeus said: "In my honest opinion we looked like nuts in those years. Nobody can have been as badly dressed on stage as we were."

And the reason for their bold fashion choices lay not just in the pop glamour of the late 70s and early 80s, but also in the Swedish tax code.

According to Abba: The Official Photo Book, published to mark 40 years since they won Eurovision with Waterloo, the band's style was influenced in part by laws that allowed the cost of outfits to be deducted against tax – so long as the costumes were so outrageous they could not possibly be worn on the street.

I guess that explains this:


Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
All the things I could do
If I had a little money
It's a rich man's world

(Hat Tip: Pippa Browde, Sergio Pareja.)

February 17, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

NY Times: Why Are There Fewer Professors in the Public Square?

PublicNew York Times op-ed:  Professors, We Need You!, by Nicholas Kristof:

Some of the smartest thinkers on problems at home and around the world are university professors, but most of them just don’t matter in today’s great debates.

The most stinging dismissal of a point is to say: “That’s academic.” In other words, to be a scholar is, often, to be irrelevant.

One reason is the anti-intellectualism in American life ... . Yet it’s not just that America has marginalized some of its sharpest minds. They have also marginalized themselves.

“All the disciplines have become more and more specialized and more and more quantitative, making them less and less accessible to the general public,” notes Anne-Marie Slaughter, a former dean of the Woodrow Wilson School at Princeton and now the president of the New America Foundation.

There are plenty of exceptions, of course, including in economics, history and some sciences, in professional schools like law and business, and, above all, in schools of public policy; for that matter, we have a law professor in the White House. But, over all, there are, I think, fewer public intellectuals on American university campuses today than a generation ago. ...

Professors today have a growing number of tools available to educate the public, from online courses to blogs to social media. Yet academics have been slow to cast pearls through Twitter and Facebook. Likewise, it was TED Talks by nonscholars that made lectures fun to watch (but I owe a shout-out to the Teaching Company’s lectures, which have enlivened our family’s car rides).

I write this in sorrow, for I considered an academic career and deeply admire the wisdom found on university campuses. So, professors, don’t cloister yourselves like medieval monks — we need you!

February 17, 2014 in Legal Education | Permalink | Comments (0)

A Georgetown LR&W Professor's Anguished Poem

Tiscone-kristenKristen K. Robbins-Tiscione (Georgetown), If I Am a Color:

The second-class status of Legal Research and Writing faculty has been perpetuated by the legal academy for decades. Legal Research and Writing faculty are primarily responsible for teaching legal research and practical legal writing skills to law students, yet they remain ineligible for tenure at roughly 94 percent of the nation’s accredited law schools. This is particularly galling at a time when legal education is under heavy attack for failing to prepare students for law practice.

This poem reflects the anguish of at least one female Legal Research and Writing professor’s twenty-year struggle for equality. The accompanying short article puts the poem in context for the reader.

I am not black.
I am not white.
If I am a color, I am clear. ...

With my own, I can speak.

With the rest, I must listen.
Agree. Defer.

With my own, I am loved.

To the rest, I am lesser.
Unwelcome. Tolerated. ...

I see wagons.
Circling. Excluding.

I am angry.

I am a raisin.
In the sun.

I am a teacher.
I teach legal writing.

February 17, 2014 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 284

IRS Logo 2Legal Insurrection:  They’re From the IRS, and They’re Here to Help, by Neo-neocon:

At this point it’s tempting to regard the IRS as not-so-secret agents of the Obama administration and the Democrats. This is not paranoia. As Ed Rogers wrote in the WaPo, it is fact: 

Encouraged by the lack of a public backlash, an uninquisitive press, cover from the White House and an eager-to-please bureaucracy, the Democrats are boldly counting on the IRS to be their political and policy enforcer.This statement isn’t an overreach by the “vast right-wing conspiracy” or a phony crisis created by hecklers (like me) on the right — it goes back to the early stages of President Obama’s reelection campaign.

Rogers goes on to list some of the more egregious examples of what has occurred and how the administration has been emboldened by the fact that so far there have been few negative consequences to them for their actions.

The hue and cry that might have been expected – and to a certain extent came at first, when some of the revelations about Tea Party harassment were revealed – has been muted and blunted. So now the excesses are being further and more openly institutionalized. ...

I wonder, though, how much the IRS scandal has affected Obama’s and the Democrats’ ratings with the public. I can’t find any polls about the subject since last summer, but my guess is that it has had some part in the downturn. I certainly hope so; all Americans of any political stripe should be highly alarmed, although of course that isn’t happening. One of the most pernicious reasons is ignorance of history; some people say, “Oh, all administrations do this.”

No, they don’t – at least, not really like this in terms of extent and success. Nixon was excoriated for expressing a desire to do it in the Nixon tapes, and the assumption has been that he did do it. But in fact for the most part he failed at it. Why? Because the heads of the IRS at the time would not cooperate (see this for a background discussion).

Here’s a very short history of the efforts of other presidents. You can see that, except for the Nixon example, it seems that most of the presidents who were involved with any small success in such undertakings were Democrats. That’s no accident because, as “Nixon henchman Jack Caulfield astutely complained,…the IRS was a ‘monstrous bureaucracy…dominated and controlled by Democrats.’”

So Nixon is convicted in the eyes of the public for what appears to have been largely thought crime, whereas the Obama administration and its handmaidens such as Lois Lerner get off seemingly free (so far) for the actual crime. Obama’s much greater success compared to earlier efforts appears to be due to several factors: greater drive, boldness, and scope; public ignorance/apathy; the coverup attempts by much of the MSM; and the simpatico political persuasion of much of the IRS.

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February 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, February 16, 2014

WSJ: How to Figure Out Your Cost Basis

Wall Street Journal Tax Report:  How to Figure Out Your Cost Basis, by Laura Saunders:

Did you sell an investment held in a taxable account last year? If so, prepare for a struggle—or at least a brush—with a crucial but confusing area of the tax code. It goes by the name "cost basis," and it is the starting point for measuring profit or loss on the sale of an investment, whether it is a stock, bond, house, artwork or other asset. Many investors find it baffling. ...

Experts say the IRS rarely questions or audits cost-basis data, except in abusive tax shelters. To help the confused and discourage cheating, Congress passed a law in 2008 requiring financial firms to track cost basis for certain assets and report it both to customers and the IRS after a sale.

In the short run, these rules might add to taxpayers' confusion while they phase in. For now, they cover some assets but not others. If you are facing a cost-basis conundrum, here are some tips: ...


February 16, 2014 in Tax | Permalink | Comments (0)

Top 5 Tax Paper Downloads

Worst Interview Faux Pas. Ever.

Jackson FishburneAnchor:  Did you get a lot of reaction to the Super Bowl commercial?

Samuel L. Jackson:  What Super Bowl commercial? ...

Anchor (flustered):  My mistake. ...

Jackson:  I'm not Laurence Fishburne. ...

Anchor:  That was my fault. My mistake. ...

Jackson:  We don't all look alike. ...

Co-anchor (trying to help):  He thought you were Bob Dylan.

February 16, 2014 in Legal Education, Tax | Permalink | Comments (2)

The IRS Scandal, Day 283

IRS Logo 2New York Post editorial:  Calling Lois Lerner:

The American people still need to hear from Lois Lerner. That’s a point that can’t be made often enough.

Remember her? She’s the IRS official who gave a statement before Congress declaring herself innocent of any wrongdoing — and then promptly took the Fifth.

Recently, Congress unearthed another IRS e-mail on which she was copied, talking about taking “off-plan” a discussion about how to harass the 501(c)(4) groups the IRS had targeted. Meanwhile, leaks from officials involved in the investigation claim the FBI has not found ­anything criminal.

That’s an amazing finding, given the statement by the American Center for Law and Justice, which represents the IRS targets, that the FBI hadn’t interviewed a single of the center’s 41 ­clients. ...

[W]e hope Congress is making clear that whatever happens with the Justice investigations, the American people need to get Lois Lerner back on that stand to answer questions under oath.

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February 16, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Saturday, February 15, 2014

Tom Perkins: Americans Should Get One Vote for Every Dollar of Taxes Paid

NY Times Dealbook (2013)New York Times Deal Book:  The Tom Perkins Theory of Taxation and Representation, by William Alden:

This time, Tom Perkins knew he was courting controversy.

Mr. Perkins, the 82-year-old venture capitalist who caused a stir last month when he said in a letter to the editor of The Wall Street Journal that protesters criticizing the wealthy were similar to Nazis, has fully embraced a new role as a spokesman for the beleaguered “1 percent.” In a conversation with a Fortune magazine editor at a San Francisco event on Thursday, Mr. Perkins spent an hour riffing on his position that the wealthiest Americans are being unfairly treated.

One major theme was taxation. Many wealthy businessmen argue that the rich pay too much in taxes. Mr. Perkins goes several steps further.

“The Tom Perkins system is: You don’t get to vote unless you pay a dollar of taxes,” he said at the end of the interview, explaining that he had spent some time formulating this theory. He cited Thomas Jefferson and Margaret Thatcher to provide ideological precedent.

“But what I really think is, it should be like a corporation. You pay a million dollars in taxes, you should get a million votes,” he said. “How’s that?”  The remark drew laughter from some in the audience, who apparently thought the investor was joking. In a summary of the event, a Fortune reporter wrote: “Perkins later said offstage that what he meant was that, with 50 percent of registered U.S. voters not paying taxes, ‘we got ourselves into a mess.’”

(Hat Tip: Mike Talbert.)

February 15, 2014 in Tax | Permalink | Comments (6)

BC Law Prof's Cell Phone Tirade

CellMary Ann Chirba (Boston College) asked me to share her cell phone policy:

A chronic issue flared yet again today. With this message, I hope to extinguish it once and for all.

Continued cell phone use in class is absolutely unacceptable for many reasons. Here is the short list:

  • 1. It is distracting to your classmates and me.
  • 2. It is completely unprofessional. Try engaging in this behavior with your supervisor at work and see how well it goes over.
  • 3. It is rude. It is simply and undeniably rude.

I am extremely frustrated because I have never had to mention this more than once in past years.  We are up to 9 times this year - and these do not include the instances that I have seen but not mentioned.

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February 15, 2014 in Legal Education | Permalink | Comments (19)